in Re Regal Energy, L.L.C.

• Court: Court of Appeals of Texas
• Decided: September 19, 2013
• Docket: 13-13-00351-CV
• Status: Published

Opinion

NUMBER 13-13-00351-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

IN RE REGAL ENERGY L.L.C., ET AL.

On Petition for Writ of Mandamus.

MEMORANDUM OPINION Before Justices Rodriguez, Benavides, and Longoria Memorandum Opinion by Justice Benavides Relators, Regal Energy, L.L.C., Regal Energy Operating, L.L.C., Red River

Securities, L.L.C., Brian Keith Hardwick, Terry P. Gray, Henry Jody Redlich III, John

Michael Peddicord II, Scott Thomas Schaffer, Regal Nash #1 Joint Venture, Regal Nash

#2 Joint Venture, Regal Boonesville #1 Joint Venture, Regal Bennett #1 Joint Venture,

Regal Blessing #1 Joint Venture, and Paul Vaugh, filed a petition for writ of mandamus

in the above cause on July 17, 2013, requesting that we direct the trial court to grant

their motion to transfer venue of the underlying case from Nueces County to Collin

County, Texas. We deny the petition for writ of mandamus. I. BACKGROUND

Clifford L. Zarsky passed away on June 18, 2011. His family filed an application

to probate his estate in Nueces County Court at Law Number Four, and the probate of

his estate remains pending in that court. In the probate proceeding, Joyce C. Zarsky,

individually and in her capacity as co-executrix of the estate, Robin Perrone, individually

and in her capacity as co-executrix of the estate, and Zarsky General Partner, L.L.C.

(collectively the “Zarsky parties”), brought suit against relators for alleged violations of

the Texas Securities Act and the Texas Deceptive Trade Practices Act, fraud,

negligence, and negligent misrepresentation. The Zarsky parties alleged that the

relators induced the decedent, prior to his death, to purchase joint venture units in order

to receive working interests and revenue interests in oil and gas wells in the Barnett

Shale, which is located in North Texas. According to the original petition, relators

“purposefully disguised the transactions as . . . joint ventures in order to evade the rules

and regulations pertaining to the sale of securities in Texas,” but the “substance of

these transactions compared with Texas securities laws dictates that [relators were]

selling securities.” The Zarsky parties alleged that relators fraudulently induced the

decedent to enter into the investments and transactions; however, the joint venture

agreements were void due to violations of the laws regarding securities.

The “Jurisdiction and Venue” section of the Zarsky parties’ petition states:

Venue is proper and this Court has jurisdiction over this matter because the matters alleged in this suit relate to a probate and estate proceeding originally filed and currently pending in this same Court. This Court has personal jurisdiction over the Defendants because they are residents of the State of Texas. This Court has subject matter jurisdiction over the claims stated herein because the damages are within the jurisdictional limits of this Court. Venue for this suit under the Deceptive Trade Practices Act (DTPA) and the other causes of action listed herein is proper 2 in Nueces County, Texas under Texas Business and Commerce Code section 17.56 and Civil Practice and Remedies Code sections 15.002, 15.033, and 15.035 in that all or a substantial part of the events or omissions giving rise to the events or omissions giving rise to the claims occurred in Nueces County, Texas.

See TEX. BUS. & COM. CODE ANN. § 17.56 (West 2011) (providing for venue under the

DTPA); TEX. CIV. PRAC. & REM. CODE ANN. § 15.002 (West 2002) (providing for venue

under the general venue statute); id. § 15.033 (West 2002) (providing for venue in

cases for breach of warranty against a manufacturer); id. § 15.035 (West 2002)

(providing for venue in cases based on a contract in writing).

Relators filed a motion to transfer venue to Collin County as a “permissive and/or

proper county of venue.” Relators alleged that venue was permissive or proper in Collin

County pursuant to the “general venue rules in Section 15.002(a) of the Texas Civil

Practice and Remedies Code.” See id. § 15.002. Relators specifically contended that

venue was proper in Collin County because it is the county where all relators’ principal

offices and places of business are located, all of the relators do business there, and all

actions complained of occurred there. Relators further alleged that the contractual joint

venture agreements underlying their causes of action provide:

Section 12.4—Applicable Law. This Agreement and the application or interpretation hereof shall exclusively be governed by and construed in accordance with the laws of the State of Texas. This Agreement shall be deemed to be performable in and venue shall be mandatory in Plano, Texas.

Relators thus argued that “this case should be transferred to Collin County because the

Plaintiffs have pled no venue facts to support venue of this suit in Nueces County, and

Collin County is a permissive and/or proper county of venue.” Relators supported their

3 motion to transfer venue with copies of the joint venture agreements and an affidavit

executed by Brian Hardwick, one of the relators.

The Zarsky parties filed a response to the motion to transfer venue which

substantially reiterated the allegations in their petition regarding jurisdiction and venue.

They supported their response with affidavits, pleadings, stipulations, and assorted

documentation pertaining to the joint venture investments.

The trial court denied the motion to transfer venue and this original proceeding

ensued. By four issues, which we address out of order, relators contend: (1) the trial

court clearly abused his discretion by denying the motion to transfer venue; (2) the trial

court does not have exclusive jurisdiction over this matter; (3) the mandatory venue

provision of section 15.020(b) of the civil practice and remedies code requires the case

to be transferred to Collin County; and (4) the mandatory venue provision in the

agreement between the parties requires the case to be transferred to Collin County.

The Court requested and received a response to the petition for writ of mandamus from

the Zarsky parties.

II. STANDARD OF REVIEW

Under normal standards for mandamus review, mandamus will issue only to

correct a clear abuse of discretion for which the relator has no adequate remedy at law.

In re Columbia Med. Ctr. of Las Colinas Subsidiary, L.P., 290 S.W.3d 204, 207 (Tex.

2009) (orig. proceeding); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135 (Tex.

2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992) (orig.

proceeding). However, section 15.0642 of the Texas Civil Practice and Remedies Code

provides for mandamus relief to enforce “the mandatory venue provisions of this

4 chapter.” TEX. CIV. PRAC. & REM. CODE ANN. § 15.0642 (West 2002). When a trial court

fails to grant a motion to transfer venue pursuant to mandatory venue statutes,

mandamus is an available remedy and the relator is not required to show the lack of an

adequate remedy by appeal. See id.; In re Transcontinental Realty Investors, Inc., 271

S.W.3d 270, 271 (Tex. 2008) (orig. proceeding); In re Tex. Dep’t of Transp., 218 S.W.3d

74, 76 (Tex. 2007) (orig. proceeding); In re Mo. Pac. R.R. Co., 998 S.W.2d 212, 215–16

(Tex. 1999) (orig. proceeding). In contrast, as a general rule, permissive venue

determinations are not reviewable by mandamus. In re Team Rocket, L.P., 256 S.W.3d

257, 262 (Tex. 2008) (orig. proceeding); see TEX. CIV. PRAC. & REM. CODE ANN. §

15.0642; In re Mo. Pac. R.R. Co., 998 S.W.2d at 215–16; In re Masonite Corp., 997

S.W.2d 194, 197 (Tex. 1999) (orig. proceeding). Mandamus review of permissive

venue determinations is appropriate only in “extraordinary circumstances.” In re Team

Rocket, L.P., 256 S.W.3d at 262; In re Reynolds, 369 S.W.3d 638, 647 (Tex. App.—

Tyler 2012, orig. proceeding).

III. LACHES

We first address the Zarsky parties’ assertion that relators’ delay in filing this

original proceeding precludes mandamus relief. Real parties assert that the trial court

denied the motion to transfer venue on October 16, 2012, more than nine months ago,

yet the petition for writ of mandamus was not filed until July 17, 2013.

Although mandamus is not an equitable remedy, its issuance is controlled largely

by equitable principles. In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 676 (Tex. 2009)

(orig. proceeding) (per curiam). One such principle is that “[e]quity aids the diligent and

not those who slumber on their rights.” Rivercenter Assocs. v. Rivera, 858 S.W.2d 366,

5 367 (Tex. 1993) (orig. proceeding) (quoting Callahan v. Giles, 137 Tex. 571, 576, 155

S.W.2d 793, 795 (1941) (orig. proceeding)). To invoke the equitable doctrine of laches,

the moving party ordinarily must show an unreasonable delay by the opposing party in

asserting its rights and also the moving party’s good faith and detrimental change in

position because of the delay. In re Laibe Corp., 307 S.W.3d 314, 318 (Tex. 2010)

(orig. proceeding); Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80 (Tex. 1989).

Under certain circumstances, a delay in the filing of a petition for writ of mandamus may

be justified. In re Int’l Profit Assocs., Inc., 274 S.W.3d at 676; see In re SCI Tex.

Funeral Servs., Inc., 236 S.W.3d 759, 761 (Tex. 2007) (orig. proceeding) (holding that a

delay of slightly less than six months did not constitute laches because the time was

required to obtain records of numerous discovery hearings and brief issues for court).

Real parties do not assert that they have suffered a detrimental change in their

position due to relators’ delay. Accordingly, while we view the nine-month period of

delay in this case with a jaundiced eye, we conclude that the delay alone does not

preclude mandamus review. See In re Laibe Corp., 307 S.W.3d at 318. We therefore

reject real parties’ argument that equitable considerations bar the granting of relief on

this petition for writ of mandamus. We now turn to the merits of this original proceeding.

IV. PERMISSIVE VENUE

Relators’ motion to transfer venue was generally premised on permissive venue

issues. Relators sought a transfer of venue to Collin County as a “permissive and/or

proper county of venue.” By petition for writ of mandamus, relators contend that venue

is not proper in Nueces County because the relators have established that they “are

6 domiciled in Plano, Collin County, Texas and that the actions and/or events that have

occurred, occurred in Plano, Collin County, Texas.”

As stated previously, we do not generally review permissive venue issues by

mandamus. In re Team Rocket, L.P., 256 S.W.3d at 262; see TEX. CIV. PRAC. & REM.

CODE ANN. § 15.0642; In re Mo. Pac. R.R. Co., 998 S.W.2d at 215–16; In re Masonite

Corp., 997 S.W.2d at 197. Further, relators do not present argument or authority

indicating that this case presents “extraordinary circumstances” that would merit

mandamus review. In re Team Rocket, L.P., 256 S.W.3d at 262; see also In re

Masonite Corp., 997 S.W.2d at 197; In re Reynolds, 369 S.W.3d at 647. Accordingly,

we do not address any issue pertaining to permissive venue in this original proceeding.

To the extent that relators’ first issue pertains to permissive venue, it is overruled.

V. VENUE BASED ON A MAJOR TRANSACTION

Relator’s petition for writ of mandamus contends that venue should have been

transferred to Collin County based on the mandatory venue provision of section

15.020(b) of the civil practice and remedies code. See TEX. CIV. PRAC. & REM. CODE

ANN. § 15.020(b). Section 15.020 is one of the mandatory venue provisions contained

in chapter 15 of the civil practice and remedies code and is therefore enforceable by

mandamus. See id. § 15.0642; Shamoun & Norman, LLP v. Yarto Int’l Group, LP, 398

S.W.3d 272, 292 (Tex. App.—Corpus Christi 2012, pet. dism’d) (combined appeal &

orig. proceeding). This section provides that contractual venue selection clauses may

be enforceable in cases involving “major transactions.” TEX. CIV. PRAC. & REM. CODE

ANN. § 15.020. A “major transaction” is “a transaction evidenced by a written agreement

under which a person pays or receives, or is obligated to pay or entitled to receive,

7 consideration with an aggregate stated value equal to or greater than $1 million.” Id. §

15.020(a). The definition of “major transaction” excludes transactions “entered into

primarily for personal, family, or household purposes, or to settle a personal injury or

wrongful death claim . . . .” Id. Section 15.020 is not applicable where: (1) the

agreement regarding venue was unconscionable at the time that it was made; (2) the

agreement regarding venue is voidable under chapter 272 of the business and

commerce code, relating to construction and repairs of improvements to real estate; or

(3) venue is established under a statute other than title 2 of the civil practice and

remedies code. Id. § 15.020(d). Relators contend that section 15.020 applies to this

case because the Zarksy parties have alleged in their pleadings that relators

fraudulently induced the decedent to purchase $5,891,625.00 in joint venture securities.

Relators’ motion to transfer venue does not reference section 15.020 or

otherwise invoke mandatory venue based on a major transaction. It is well established

that arguments not presented to the trial court will not be considered in a petition for writ

of mandamus. See In re Am. Optical Corp., 988 S.W.2d 711, 714 (Tex. 1998) (orig.

proceeding); Advance Payroll Funding, Ltd. v. Landry Marks Partners, LP, 254 S.W.3d

710, 714 (Tex. App.—Dallas 2008, no pet.); In re Olshan Found. Repair Co. of Dallas,

LLC, 192 S.W.3d 922, 923 (Tex. App.—Waco 2006, orig. proceeding) (per curiam); In

re Chu, 134 S.W.3d 459, 463 (Tex. App.—Waco 2005, orig. proceeding); see also In re

Weisinger, No. 12-12-00278-CR, 2013 WL 776355, at *1 (Tex. App.—Tyler Feb. 28,

2013, orig. proceeding) (mem. op.) (not designated for publication). If a party does not

present an argument to the trial court through a timely request, objection, or motion, the

argument is not preserved and cannot be made on appeal. See TEX. R. APP. P.

8 33.1(a)(1); In re E. Tex. Med. Ctr. Athens, 154 S.W.3d 933, 936, 937–38 (Tex. App.—

Tyler 2005, orig. proceeding) (applying this rule with regard to the “demand and refusal”

requirement for mandamus relief). Relators’ contention that venue should be

transferred to Collin County based on mandatory venue in cases involving a major

transaction as specified in the civil practice and remedies code was not presented to the

trial court. Accordingly, we do not consider this issue herein. See In re Am. Optical

Corp., 988 S.W.2d at 714. We overrule relators’ third issue.

VI. CONTRACTUAL VENUE

In their motion to transfer venue, relators contend that the venue provision in the

agreement between the parties establishes that venue is mandatory in Collin County.

As noted previously, the joint venture agreements specify that they are “performable in

and venue shall be mandatory in Plano, Texas.” In general, the fixing of venue by

contract is invalid. Shamoun & Norman, LLP, 398 S.W.3d at 293; In re Great Lakes

Dredge & Dock Co., 251 S.W.3d 68, 76 (Tex. App.—Corpus Christi 2008, orig.

proceeding) (citing Fid. Union Life Ins. Co. v. Evans, 477 S.W.2d 535, 537 (Tex. 1972)).

Relators present no argument or authority regarding this proposition of law, or that the

venue provisions in the joint venture agreements require mandatory venue in Collin

County, or that the contractual venue provisions constitute mandatory venue provisions

which are susceptible to mandamus review. Compare TEX. CIV. PRAC. & REM. CODE

ANN. § 15.0642 (providing for mandamus review of mandatory venue provisions) with id.

§ 15.035(a) (providing for permissive venue based on contract performance); see In re

Applied Chem. Magnesias Corp., 206 S.W.3d 114, 116 (Tex. 2006) (original

proceeding) (“Section 15.035 of the Civil Practice and Remedies Code is a permissive,

9 not mandatory, venue provision dealing with written contracts.”). We overrule relators’

fourth issue.

VII. JURISDICTION

Finally, relators contend that the court below, as a probate court, does not have

exclusive jurisdiction in this matter, thus venue should be transferred to Collin County.

The question of venue presupposes that more than one court could exercise jurisdiction

over the case. See Subaru of Am. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220

(Tex. 2002) (explaining that jurisdictional statutes speak to the court’s power to hear

case). This proceeding arises from Nueces County Court at Law Number Four. See

TEX. GOV’T CODE ANN. § 25.1802 (West Supp. 2011) (delineating the jurisdiction for

Nueces County courts at law). Texas Government Code section 25.003(d) authorizes

county courts at law to exercise original probate jurisdiction unless there is a statutory

probate court in the same county. See id. § 25.003(d), (e) (West Supp. 2011); see also

TEX. PROB. CODE ANN. § 4C(b) (West Supp. 2011) (delineating the jurisdiction for

probate proceedings); id. § 607A(b) (West Supp. 2011) (delineating the jurisdiction for

guardianship proceedings). A county court at law with original jurisdiction over probate

proceedings may exercise pendent and ancillary jurisdiction as necessary to promote

judicial efficiency and economy. See TEX. PROB. CODE ANN. § 4A(b); see also id. § 3(e)

(West Supp. 2011) (stating that a “probate court” is any court exercising original probate

jurisdiction).

Relators’ contention that the Nueces County Court does not have exclusive

jurisdiction in this matter was not raised in the trial court. See In re Am. Optical Corp.,

988 S.W.2d at 714; Advance Payroll Funding, Ltd., 254 S.W.3d at 714. Moreover, this

10 issue is irrelevant to the issue of whether mandatory venue for the underlying lawsuit

lies in Collin County. See TEX. R. APP. P. 47.1, 47.4; Herring v. Welborn, 22 S.W.3d

132, 141 (Tex. App.—San Antonio 2000, no pet.) (stating that jurisdictional

requirements, such as those contained in the probate code, take precedence over

mandatory venue provisions). In this regard, we note that relators do not contend that

the trial court lacks jurisdiction over the underlying case. We overrule relators’ second

issue.

VIII. CONCLUSION

Having overruled each of relators’ issues, we deny the petition for writ of

mandamus.

__________________________ GINA M. BENAVIDES, Justice

Delivered and filed the 19th day of September, 2013.